The budget has provided a number of significant changes impacting on financial planning strategies.  These have been outlined in this summary.  The major changes include:

• Deferral of higher concessional contributions cap for individuals aged 50 and over from 1 July 2012
• Higher tax on concessional contributions for very high income earners from 1 July 2012
• Mature age worker tax offset (MAWTO) to be phased out from 1 July 2012
• Increased Medicare levy low income thresholds from 1 July 2011
• Means testing of net medical expenses tax offset (NMETO) from 1 July 2012
• FTB Part A increase
• Family Tax Benefit (FTB) A eligibility from January 2013
• Supplementary Allowance
• Schoolkids Bonus
• Aged care reform from 1 July 2014
• Accelerated real estate review from 1 July 2012
• Reduced payment period of Australian Government Payments for people who are temporarily absent from Australia from 1 January 2013
• Australian residency requirements for the Age Pension from 1 January 2014
• Removal of the capital gains tax discount for non-residents
• Changes to tax rates for non-residents
• Company Loss Carry Back
• Small Business Immediate Write-Off Extension
• Previous proposals shelved
  • Reduction of the corporate tax rate to 28%. The corporate tax rate will remain at 30%.
  • Standard tax deduction of $1,000 for work-related expenses and the cost of managing tax affairs.
  • 50% discount for the first $1,000 of interest income

The following changes announced since last year’s budget have also been confirmed:

• Confirmation of changes to marginal income tax rates & thresholds
• The minimum draw down relief for superannuation pension holders will be extended next year with minimums being 75% of the original rules and returning to the normal rates from July 1 2013.
• Changes to co-contribution arrangements
• Superannuation guarantee rate to progressively rise from 9% to 12%
• Maximum age limit for the superannuation guarantee to be abolished
• Low income superannuation boost
• Allowances & supplements  to reduce the impact of the introduction of a price on carbon